DoD spending to be 1999 battleground

The National Basketball Association lockout has meant that the cry of DEFENSE normally heard in arenas this time of year has instead been coming from only one place-Capitol Hill.

Republicans have let it be known in recent weeks that Pentagon spending will be one of the issues they will try to use next year to distinguish themselves from the Democrats on the budget.

But it is hard to see how this can be successful.

First, how will Republicans be able to criticize the Clinton Administration for military spending that is too low when the levels for fiscal 1998 and 1999 were set by the caps they agreed to when the Balanced Budget Act was adopted in 1997? This is the agreement that congressional Republicans so far have pointed to with great pride, as they consider it one of the foremost achievements since they became the majority in 1994. It is hard to imagine that they will be able to take credit for the deficit reduction part of that agreement, and at the same time, blame Democrats for the provisions that reduced military spending.

It is far more likely that any such attempt to divide the act will result in intraparty Republican squabbling, with members who believe that a balanced budget is the critical issue pitted against Pentagon supporters, leaving the leadership to referee.

Second, how will Republicans be able to get the extra dollars in fiscal 2000-2002 that they want for the military without making some very difficult calls about the programs that will have to be cut to pay for it? This will be tough for three reasons:

1. Starting in fiscal 2000, the caps on defense and nondefense will be combined into a single cap, so all programs will have to compete for the same dollars.
2. It will be exceptionally difficult in fiscal 2000 and beyond when the Balanced Budget Act (the one for which, as noted above, Republicans proudly claim at least partial paternity) requires tighter appropriations limits and bigger spending reductions.
3. Congress made things even tougher for themselves this year by advance funding more than $9 billion of fiscal 2000 programs. Senate Budget Committee Staff Director Bill Hoagland recently told the fall conference of the American Association of Budget and Program Analysis that the combination of the already tight limit and the $9-plus billion fiscal 2000 commitments means Congress and the president will have to agree to more than $28 billion in budget authority cuts from defense and nondefense programs just to comply with the fiscal 2000 cap. This translates into an approximately five percent cut across the board.

But if they decide not to maintain the existing caps they will have to support a change in the budget process to raise them or some type of accommodation-like misusing the emergency exception-to get around them. Either way, the result will be the type of spending increase that angered the Republican base in the 1998 election. Therefore, it will be as close to a lose-lose situation as will ever exist in the annual budget debate.

Third, it is hard to see the public demand for the increase in military spending. The 1996 and 1998 election results show conclusively that a variety of other issues, especially education and the environment, have far more support from a much broader segment of the population than does the Pentagon. Part of this is the perceived lack of an imminent military threat to the United States. Part is the continued strong economy and its very low unemployment rate, which has meant that many of the same engineers and others who looked to military contractors for employment opportunities are now finding them elsewhere.

As a result, the grassroots demand for higher military spending and the justification of higher jobs that was previously used so effectively by the Pentagon now may no longer be as effective.

None of this is an answer to the underlying substantive question of whether military spending is below where it needs to be. The point is that next year's federal budget politics and procedures will probably make it impossible or unnecessary to get an answer. This means that the supposed Republican attempt to make military spending into a budget issue next year at best may fail and at worst could backfire.

Question Of The Week

Unfinished Business. The question from two week's ago that asked readers to create a federal budget specialty drink brought a late response that was too good not to mention. As a result, the judges have awarded an additional "I Won A Budget Battle" T-shirt to Diana Meredith of the Office of Management and Budget. Diana suggested a "Surplus Martini" which is made by mixing 70 billion parts vermouth with 1.7 trillion parts gin.

Last Week's Question. As expected, there were far more than three correct responses to last week's question so the three winners were selected by a random drawing. Congratulations and "I Won A Budget Battle" tee shirts to Steve Newman of Akin Gump, Pepper Santalucia of the Congressional Budget Office and Reid Edwards of the Berkeley Labs in Berkeley, Calif., all of whom knew that the House Budget Committee has 43 members. Steve also gets special credit for the most detailed answer to the bonus question. He knew that the House Budget Committee originally had 23 members when it began, but that the House increased the number in June 1975 to 25.

This Week's Question. Think about this while you are doing your holiday shopping and you could get your own "I Won A Budget Battle" T-shirt to wear while downing eggnog this holiday season. What would the ideal gift be for the federal budget decision maker on your list? Send the name (Kasich, Domenici, Greenspan, etc.) or title (budget committee chair, CBO director, House Speaker, Fed chair, etc.) of the person and the gift you think would be most appropriate to scollender@njdc.com.